Minority areas slowest to recover from Hurricane Ike

A crew with The Renovation Team Inc. works Wednesday to rebuild a home damaged by Hurricane Ike in the 600 block of Jack Johnson Boulevard in Galveston.

A crew with The Renovation Team Inc. works Wednesday to rebuild a home damaged by Hurricane Ike in the 600 block of Jack Johnson Boulevard in Galveston.

Photo: James Nielsen, Staff

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A media tour Wednesday gave Galveston County appraiser Jordan Klein an opportunity to check on how repairs are progressing at one of the thousands of homes damaged by Hurricane Ike in 2008.

A media tour Wednesday gave Galveston County appraiser Jordan Klein an opportunity to check on how repairs are progressing at one of the thousands of homes damaged by Hurricane Ike in 2008.

Photo: James Nielsen, Staff

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County appraiser Jordan Klein doesn't have to look hard to see how some properties, like this one at Crystal Beach, were damaged by Hurricane Ike.

County appraiser Jordan Klein doesn't have to look hard to see how some properties, like this one at Crystal Beach, were damaged by Hurricane Ike.

Photo: James Nielsen, Staff

Minority areas slowest to recover from Hurricane Ike

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GALVESTON - Scores of vacant lots and empty houses in Galveston's minority neighborhoods are mute evidence of the lingering effects of the destruction wrought by Hurricane Ike five years ago.

"Vacant house after vacant house after vacant house," said David Miller, president of the local chapter of the National Association for the Advancement of Colored People, on a drive through Galveston's low-income areas.

At the corner of 27th Street and Church, he pointed to a park-like expanse of grass where six storm-damaged houses were torn down. In many cases, Miller said, the owners were forced to find another place to live while continuing to make mortgage payments. Many vacant lots were once rental properties.

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"They had to let things go," said Miller, a Galveston Planning Commission member who knew many of the former owners.

Signs of recovery

Five years after Hurricane Ike smashed into the Texas Gulf Coast on Sept. 13, 2008, killing 74 people and causing nearly $25 billion in damage, data from the Galveston Central Appraisal District show that more than 4,000 properties that suffered 50 percent or more damage have yet to be repaired or rebuilt. Studies by Texas A&M University show that housing in minority and low-income areas suffered proportionately more damage and were the slowest to rebuild.

Nevertheless, the economies in the areas worst hit by the storm have largely recovered, as reflected by surging real estate prices and new construction. Total property values on the Bolivar Peninsula, for example, rebounded from $278.91 million just after Ike to $691.04 million this year.

Yet storm-damaged properties scattered throughout the county remain unimproved, according to 2013 appraisal data. More than 48,000 properties declined in value in Galveston County after the storm and about 11,000 were severely damaged. Of those properties suffering 50 percent or greater damage, 4,624 showed as unimproved on the 2013 property roll. In most of these cases a decrepit building or an empty lot is all that remains.

The largest clusters of these properties are along the edge of Galveston Bay, on Galveston Island and on the Bolivar Peninsula. A few empty lots remain in affluent communities such as Clear Lake Shores and Kemah that were heavily damaged by a surge rolling in from Galveston Bay, but for the most part they have been rebuilt. Farther south in San Leon, a community where $500,000 homes often sat next to shabby fishing shacks, there are scores of empty lots where structures once stood.

New homes are rising on a few of the lots listed as unimproved. Contractor Troy Bellmyer is building on one of those lots in Bayou Vista, a subdivision swamped by storm water from Highland Bayou.

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"After the storm, everybody panicked and they wanted out of here," Bellmeyer said. "The storm is a distant memory now. It's like the storm is 100 years away."

Changing character

An informal survey of storm-damaged properties that remain unimproved showed that many are in areas where shacks, trailers and other lower-value buildings stood before the storm, including San Leon, the Bolivar Peninsula and parts of Galveston.

"People maybe didn't have insurance, so they had no funds to rebuild," said Neil Spiller, a real estate agent on the Bolivar Peninsula. "I'm sure there are a lot of financial and economic reasons why people couldn't replace the properties they have."

By scouring shabby properties from the map, the hurricane opened the way for more expensive development that is changing the character of many neighborhoods. "It gave the island a chance to upgrade some of those distressed properties," said Kelly Kelley, a Galveston Island real estate agent.

Poor areas swamped

One of the largest groups of properties that remain unimproved is in a Galveston area mostly populated by Hispanics and blacks. Galveston's 10-mile long seawall blunted the violent waves topping the storm surge from the Gulf, but less savage waters rolled in on the side of the island facing the bay and swamped the largely minority neighborhoods.

There were no destructive waves to wrench away structures as there were on the Bolivar Peninsula. Instead, water rose around the houses and seeped inside, sloshing around the contents and fouling them with pollutants.

John Harry, 75, said his house at 3315 Ave. M appeared undamaged when he returned to the island after the storm. He opened the door and found otherwise. "It was a mess," he said. His furniture was ruined and he had to tear out all the Sheetrock.

Among the worst-hit coastal areas, the only identifiable minority community is on Galveston Island. Housing in this area was more likely to be damaged, and was damaged more heavily, than housing in non- minority areas, according to a Texas A&M University study published in 2012. Another recent A&M study found that "areas with high proportions of non-white residents and lower valued homes received more damage than higher-valued counterparts in whiter areas, despite being farther from or outside high-risk areas."

Houses in the minority community tended to have lower values and therefore the dollar loss was lower, but the percentage of the loss tended to be greater. "Maybe the house was only worth $50,000, but the loss was half the value," said Texas A&M professor Walter Peacock, a co-author of both studies.

A 2010 study by then Texas A&M graduate student Dustin Henry, now a senior planner for the city of Galveston, found that homes in low-income areas on the island lost at least 44 percent of their value after the storm, compared to a median loss of 29 percent in other areas.

Long-term neglect or disinvestment in the neighborhoods may have made the homes more vulnerable, the 2012 study said.

That study also found that houses in the minority area were less likely to have insurance, and that those that had insurance were less likely to receive a settlement from the insurance company. The finding "suggests a disturbing lack of access to perhaps the most important resource for recovery," the study says.

Long-term vulnerability

Peacock said that because the area is lower income, most of its residents rented rather than owned. Henry's study showed that apartments on the island suffered excessively, with appraised values plummeting 51 percent. For rental property owners, "It's a clear business decision as to how you are going to build back or if you are going to build back," Peacock said.

The 2012 study from the data collected immediately after the storm suggest that "older, more disadvantaged neighborhoods are perhaps the most vulnerable over the long term," the study says. "They are certainly rebuilding and recovering at a slower pace and the literature suggests that they may well be less likely to ever recover."